Report: Office to housing conversions occurring in the Bay Area

The office-to-apartment conversion is gaining momentum across California, helping reshape underutilized commercial spaces into much-needed housing, according to a new report from Rent Cafe.

While Los Angeles has more apartments underway in California than all the other areas combined, several other metro areas, including San Francisco and San Jose are contributing significantly to the trend. 

According to the report: 

• The San Francisco-Oakland-Berkeley metro area is set to convert 483 apartments from former office spaces, representing 30.7% of all adaptive reuse projects in the region.
• San Jose-Sunnyvale-Santa Clara is adding 394 apartments from office-to-apartment conversions, which represents 38.9% of all adaptive reuse projects in the area.
• In total, 1,573 apartments are planned through various adaptive reuse initiatives in the Bay Area. Hotels are also a major contributor, with 428 apartments (27%) coming from repurposed hospitality properties. Additionally, entertainment venues (19%), warehouses (12%), and factories (11%) are being transformed into residential units.
• Statewide, 16,236 future apartments are in the pipeline from all types of adaptive reuse projects, with 6,257 units (38.5%) coming specifically from office conversions. 

To further promote conversion projects, many cities are offering financial incentives and streamlining the conversion process, according to the report. In New York City, converted buildings with at least 25% affordable apartments can qualify for tax exemptions of up to 90%. Similarly, Washington, D.C., offers a Housing in Downtown program, which provides 20-year tax abatements for commercial-to-residential conversions.

Cities like Minneapolis and San Francisco are actively simplifying the approval process. Minneapolis recently removed public hearing requirements, while San Francisco has updated building codes, revised the planning code, and created a dedicated financing district to facilitate these conversions, the report notes.

The full report is here: https://www.rentcafe.com/blog/rental-market/market-snapshots/adaptive-reuse-office-to-apartments-2025/